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Zillow meets E*TRADE

Updated: Dec 3, 2019

The significant Real Estate disruption is finally among us. Too long have consumers waited for commission rates to descend out of the stratosphere. Real estate brokers are selling obsolete services. Their offerings to buyers, sellers, and agents were valuable 20 years ago. However, technology has provided tools that make the real estate transaction process far more efficient than the old-fashioned services of traditional broker shops. Today, there is no reason to have a broker if you are a real estate salesperson. The services brokers provide have become obsolete with technology. Ten years ago, we used things like virtual tours to sell houses and engage with the buyer on different platforms. Now, Zillow has figured a way to make agents and brokers obsolete in the real estate industry.

There has been some market consolidation and large bets placed on key players, which makes for a great explosion of disruption in the industry. The real estate market will undergo a massive transformation to put its most crucial client first, the home buyer, and seller. The times of real estate broker lineage and unnecessary bureaucracy will soon be eliminated with the availability to purchase real estate online. Zillow has finally made it possible to reduce transaction costs, instill market transparency, and bring the buyer and seller together efficiently.

E*TRADE, do you take Zillow to dominate the individual investing world in Stocks, ETFs and now real estate

People should be able to trade real estate like they can stocks. Etrade should acquire Zillow to buy and sell real estate like stocks. Zillow has finally woke up to the fact that supporting a transaction industry saturated in greed with 6% commissions is not sustainable. Their data is far more valuable than the nominal subscription fees they collect from their agent community. There is no reason to support the real estate agent when Zillow does the hardest part of the transaction, which is introducing the buyer and seller. There is no need for a salesperson, let alone two salespersons that collect a substantial dollar amount of the home's purchase price to facilitate a transaction that can take place online between principals.

Etrade should have real estate offerings on its platform. A marketplace for real estate assets of all sizes, shapes, and values. You can buy a house Fee Simple, or you can invest in your neighbor's private mortgage-backed by physical collateral. The democratization of financial markets continues to permeate throughout industries. It has made its way from Wall St to Main St. The steam roller called technology is coming for the real estate industry. Amazon has already dedicated efforts to disrupting the development industry by offering DIY houses on its platform. Next, it will provide 3D printed foundations that meet all nationally approved housing standards.

Redfin attempted to focus the real estate transaction on the buyer and seller, although they were ahead of their time. If you are ahead of the curve or behind it, you are still in the same standard deviation from the peak. Redfin thought by charging a flat fee, and they would be saving home sellers thousands. Unfortunately for Redfin, people viewed 6% and $500 much differently online in 2011. They saw $500 as a lot of money because it is tangible. They see 6% as some unknown number that is less than the amount they would leave for a tip, so it must not be that much money.

Zillow has reached critical mass and claim the title as the largest real estate marketing provider. Now it is going to focus its efforts on the transaction side of the real estate business. Zillow has the potential to be the Amazon of the real estate brokerage industry. With Zillow, there is no need to list a home on a local MLS; they are underfunded and antiquated. Zillow is a trusted source of a home's suggested value in the form of a Zestimate, which could be an opinion valued more than a real estate agent fishing for a commission.

Consider the simplicity of OfferUp. OfferUp allows you to post an item for sale online, and a buyer to purchase your item by first asking questions and inquiring about concessions. When the buyer and seller agree to terms, they respectively confirm the transaction, and the buyer transfers funds to an escrow account. Once the OfferUp confirms delivery of an item to the buyer, escrow funds are released to the seller (less) a transaction fee. What is different from a real estate transaction disclosures?

Technology has finally made the transaction process of goods and services more efficient than humans can provide. It does not matter how fast your 10-key speed is, technology will win every time.

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